HSBC UK has reduced its buy-to-let (BTL) affordability stress rates for domestic landlords, aiming to make borrowing more accessible.
The move is intended to give landlords greater flexibility when taking out mortgages, particularly for remortgaging or raising additional funds against their existing properties.
With the new stress rates in place, landlords can borrow more against the same rental income, increasing their overall borrowing capacity.
At an 80% loan-to-value (LTV) ratio, a landlord with monthly rental income of £1,290 would previously have been able to borrow £165,000 when remortgaging.
Under the updated stress rates, that same rental income now supports borrowing of £184,000, representing a 10% increase in lending potential.
Similarly, at a 70% LTV, a landlord earning £1,814 per month in rental income could previously borrow £254,000.
With the revised rates, the borrowing limit rises to £280,000, a 9% increase, allowing landlords to access additional finance more easily.
Oli O’Donoghue, head of mortgages at HSBC UK, said the lower stress rates are designed to better support landlords across the UK.
He added that reducing these rates helps more landlords either enter the buy-to-let market or continue operating within it.
According to O’Donoghue, the move also supports access to quality rental homes, contributing to broader housing affordability.
By making refinancing and borrowing easier, landlords are better equipped to manage costs and maintain their property portfolios.
This change is part of HSBC’s wider commitment to promoting stability in the rental sector, by helping landlords sustain operations in an evolving market.
The revised stress rates are expected to be particularly beneficial for landlords seeking to remortgage or raise additional funds to invest in property improvements or expand their portfolios.
HSBC’s adjustment reflects a growing trend among lenders to provide more flexible terms for landlords, acknowledging the importance of a stable rental market for tenants and the wider housing sector.
Overall, the updated buy-to-let stress rates make borrowing more accessible, helping landlords manage finances more effectively and supporting both property investment and rental market stability across the UK.
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